Claiming to boost relations between landlords and their tenants whilst improving living conditions, the Renters’ Reform Bill (RRB) is a proposed piece of legislation that has continued to divide opinion.
The bill embodies the Government’s pledge to improve the private rented sector (PRS) with landmark reforms. Many of the policies made within the Renters’ Reform Bill have faced criticism for disproportionately favouring the tenant. Yet, there are reasons to celebrate as a residential landlord, which we’ll also explore in this article.
With the developments unfolding on Wednesday 17th May looking set to change the private rented property landscape for landlords in the foreseeable future, we’ll outline the Renters’ Reform Bill as well as give an overview of what it holds in store and why this matters.
What is the Renters’ Reform Bill?
Introduced to Parliament this week, the Renters’ Reform Bill is proving divisive. Created as part of the Government’s levelling up drive, it aims to create a “fairer, more secure, and higher quality” PRS for the 4.4 million households renting their property from a private landlord.
The Secretary for State, Levelling Up, Housing and Communities Michael Gove stated in his foreword to the 2022 white paper publication, that “more than 2.8 million of our fellow citizens are paying to live in homes that are not fit for the 21st century. Tackling this is critical to our mission to level up the country”. This dialogue follows their pledge to reduce the number of poor-quality homes by 50% before 2030, made within last year’s Levelling Up White Paper.
Aiming to empower the tenant and produce a fairer system, Gove also commented “The reality today is that far too many renters are living in damp, dangerous, cold homes, powerless to put things right, and with the threat of sudden eviction hanging over them.”
“They’re often frightened to raise a complaint. If they do, there is no guarantee that they won’t be penalised for it, that their rent won’t shoot up as a result, or that they won’t be hit with a Section 21 notice asking them to leave.”
“This government is determined to tackle these injustices by offering a New Deal to those living in the Private Rented Sector; one with quality, affordability, and fairness at its heart.”
Calls for change have also hailed from campaign groups who criticise Section 21 “no-fault” evictions. Currently, these forms of evictions mean that tenants in the PRS can be asked to leave without a reason needing to be given. They have proved unpopular among those who’ve challenged this mechanism because they claim that a termination could occur without fault on the part of those residing in the property.
Yet, the Government has asserted that the Renters’ Reform Bill will bring advantages for landlords in the PRS, as well as their tenants. These benefits include making “it easier for landlords to recover properties when they need to”, including the reduction of the notice period term needed where tenants have caused damage and an online Property Portal that will give information to both parties. Gove noted just this week that it’ll “support the vast majority of responsible landlords who provide quality homes to their tenant” but landlords are still wary about these ‘pro-tenant’ changes.
A History of the Renters’ Reform Bill
The origins of this bill emerged in then-Prime Minister Theresa May’s 2019 election manifesto. Looking to maintain a minimum set of conditions across PRS properties, the Ministry of Housing, Communities and Local Government held a series of consultations.
These consultations considered:
- Stopping landlords from issuing new assured shorthold tenancies (ASTs)
- Reversing Section 21 of the Housing Act 1988 (no-fault evictions)
- Widening grounds for Section 8 possessions.
The Conservative Government then released its A Fairer Private Rented Sector white paper in June 2022. Much of the sentiments found within its foreword have been echoed in the Renters’ Reform Bill, such as “We set out a clear mission to halve the number of poor-quality homes by 2030”. This itself originated from the Levelling Up White Paper published at the start of 2022.
Continuing this commitment, the current UK Government views the Renters’ Reform Bill as one way to level up living conditions during the current economic crisis and beyond. Many, including Labour, had speculated whether such a bill was going to be introduced in Parliament after several delays. The Shadow Housing Secretary Lisa Nandy had remarked “Our message to the government is clear, do not backtrack on the promises you have made, do not drop any commitments, do not roll over to your backbenchers again.” And few expected the Government to move forward this quickly following the “procedural issues” that were reported in early May 2023.
However, the 17th May 2023 saw the Renters’ Reform Bill announced at Westminster. Now, after four years of uncertainty and speculation, the presentation of the Renters’ Reform Bill to Parliament looks set to usher in significant changes.
What Key Changes are in the Bill?
The Government’s drive for change is centred upon several new policies under the Renters’ Reform Bill.
Perhaps the most alarming change is the news that Section 21 evictions will be scrapped so no-fault evictions will become a thing of the past. Whilst this could make it more difficult to reclaim a property, other sections of the bill temper this announcement.
The new legislation would make it easier for over 2 million landlords to recover their houses or apartments when needed. Examples of relevant situations include when they want to house a close relative, the tenant stops paying their rent, or there’s a need to sell. This offers some flexibility for landlords based on their life and financial circumstances at least.
Similarly, there’s a safety caveat included which states that the amount of notice period would be shortened when the tenant(s) are behind on their rent or are “irresponsible” such as causing anti-social damage to the property.
If passed, the Renters’ Reform Bill would also make it against the law to rule out tenants with children or those in receipt of benefits. Often criticised as ‘blanket bans’, the Government claim this move is to stop discrimination against vulnerable families and sections of society who are often disproportionately disadvantaged.
Banning pets outright will no longer be permitted as tenants would have the right to request a pet by law. Landlords will have to fairly consider this and “cannot unreasonably refuse” those living within their property to own a pet. However, there are protective measures thankfully, as landlords could insist that their tenants take out pet insurance. This could then financially offset any resulting property damage.
In a major change to the PRS, the Renters’ Reform Bill will demand that every privately rented residential property conforms to the Decent Homes Standard. Currently, 21% of private renters reside in ‘unfit’ homes. Bridging private landlords and social housing providers, landlords will need to follow the latter sector which has had to adhere to minimum health and safety requirements since the start of the millennium. However, this is already a self-imposed standard for many private landlords, who already supported Gove’s claim “No one should be condemned to live in properties that are inadequately heated, unsafe, or unhealthy”.
The creation of a private rental Ombudsman will also require landlords in the PRS to sign up for membership. Any costs, if applicable, have not yet been outlined. But, Money Saving Expert founder Martin Lewis has welcomed the fact that this body will have the power to “compel apologies, take remedial action and pay compensation”. What this means in practice for the balance of support towards PRS landlords and their tenants is uncertain and may add unnecessary anguish and uncertainty among the first group.
On the plus side, the Ombudsman has been presented as a way to “provide quicker and cheaper resolutions to disputes” which could potentially ease concerns for landlords who have nightmare tenants living in their properties. The Government cites this and the new online property portal as effective ways to remove the criminal minority of landlords from the sector. The digital portal will also inspire confidence in landlords by offering relevant information, so they feel reassured that they’re meeting their obligations. This resource would ease the process for new and increasingly overwhelmed landlords. It aims to settle issues without requiring court proceedings.
When Will the Renters’ Reform Bill Finally Come into Force?
Whilst there are no certainties that the Renters’ Reform Bill will advance successfully through the several stages required to become law, The Independent has claimed “There will be a second reading in several weeks”.
However, landlords will be pleased to hear that there are a number of hurdles to pass through before it would come into effect. Following the Second Reading, it would then have to pass through both parliamentary houses (the House of Commons and the House of Lords) and be granted Royal Assent to become legislation.
Also, the National Residential Landlords Association (NRLA) were quick to reassure landlords after the announcement (May 2023) by noting these changes could take 18 months to come into effect. They commented, “The government has confirmed that it will provide at least six months’ notice of the first implementation date, after which all new tenancies will be governed by the new rules. Existing tenancies will be given a further twelve months’ notice from the first implementation date to convert to the new system.”
While the outcome and timeline for passing this new legislation are not yet set in stone, one thing is for sure – it will completely shake up how the private rented sector functions.
Keep an eye on the Inventory Base blog to see how this all plays out and whether the intended measures actually make a positive difference.